Will £530m be enough to deliver UK-wide superfast broadband?

News Analysis

Will £530m be enough to deliver UK-wide superfast broadband?

Kathleen Hall

Will the government's £530m investment be enough to deliver next-generation broadband speeds in homes and businesses across the UK?

The government recently emptied the remainder of its pot of money, diverted from the BBC's licence fees, to improve broadband speeds across the UK. The fund is to be matched by local authorities and amounts to just over £1bn. But experts are questioning whether this is likely to be enough to meet the aim of providing 90% of UK homes with superfast broadband by 2015.

Counties in England are set to share £294.8m, and those in Scotland £68.8m, as part of the £530m intended to support high-speed roll-out and a guarantee for everyone to have access to a minimum of 2Mbit/s. Around £4.4m has already been earmarked for Northern Ireland and £56.7m is to go to Wales.

Most of the remaining £106m from the investment pot will act as a contingency fund in case more is needed to deliver the broadband roll-outs, according to the Department of Culture Media and Sport (DCMS).

A further £300m is due to be allocated in 2017, but the DCMS said the department has not yet laid out plans as to how this money would be allocated.

However, Ovum senior analyst Matthew Howett warned the fund may still not be enough for the government to deliver its objectives. "There is a real danger that this pot of money alone will not be enough. In other countries investment in broadband has been much higher," he said.

The private sector is expected to take superfast broadband to around two-thirds of UK households and businesses, mainly in urban areas where investment is commercially viable. For the remaining third, the government has looked at the areas where the market will fail to deliver superfast broadband to enough premises on its own, and the cost of achieving that. It is not based on the number of people living or working in a county, said the DCMS.

Chris Holden, president of campaign group Fibre to the Home Council Europe, agrees the money would not be enough to put a system in place to meet the government's digital agenda.

"The danger in just allocating small amounts of money and asking local authorities what they want to do is that they may not allocate enough for long-term aims in delivering next-generation broadband. They will also need help in getting the maximum results for their money and additional funding beyond the amounts they are expected to raise."

But Anthony Walker, CEO of government adviser the Broadband Strategy Group, believes the issue is not the amount of money, but how it is deployed. "The fund should be in the right ballpark in terms of meeting the government's objectives, but its success will depend on the bidding process. And there are lots of practical challenges about how to build consortia," he said.

Jon Freeman, head of wireless broadband at communications company Arqiva, said local authorities are limited by what they can do with relatively small amounts of money. "The economy of scale for network deployment, coupled with an expensive procurement exercise, points to the need for a collaborative approach between local authorities to maximise the utility of the funding," he said.

A lot of regions realise how important broadband development is for regional economies and are doing whatever they can to find the money, said Howett. He believes a combination of solutions is likely to be used if the government is to meet its targets.

"There is by no means a silver bullet to achieve ubiquitous broadband coverage, and it is likely a patchwork answer will be needed," he said.

"Clearly mobile is going to be very important here. When the radio spectrum is auctioned there will be conditions attached to the sale to provide a minimum of 2Mbit/s in rural areas by 2017 - although that in itself is not an ambitious target."

Broadband investment in England

Area Investment allocation
Bedfordshire £1m
Berkshire £1.4m
Buckinghamshire £2.1m
Cambridgeshire £6.8m
Cheshire £3.2m
Cumbria £17.1
Derbyshire £7.4m
Devon and Somerset £31m
Dorset £9.4m
Durham £7.8m
East Sussex £10.6m
Essex £6.5m
Gloucestershire £8.1m
Greater Manchester £0.99m
Hampshire and Isle of Wight £8.2m
Herefordshire £6.3m
Hertfordshire £1.1m
Humber £8.5m
Kent £9.8m
Lancashire £10.8m
Leicestershire £3.8m
Lincolnshire £14.3m
Merseyside £5.7m
Norfolk £15.4m
Northamptonshire £4.1m
Northumberland £7m
North Yorkshire £18m
Nottinghamshire £4.2m
Oxfordshire £3.7m
Shropshire £8.2m
Staffordshire £7.4m
Suffolk £11.7m
Surrey £1.3m
Tees Valley £0.7m
Tyne and Wear £3.4m
Warwickshire £4m
West of England £1.3m
West Midlands £0.6m
West Sussex £6.3m
West Yorkshire £6.3m
Wiltshire £4.9m
Worcestershire £3.6m


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